AUD/USD Gained Positive Traction - Upbeat Chinese Trade Balance in Play! 

The AUD/USD managed to stop its previous session losses and regained some positive traction above the 0.7300 level despite the risk-off market sentiment and broad-based dollar strength. However, the ongoing bullish sentiment around the currency pair could be associated with the upbeat Chinese trade balance figures. The optimism over a potential vaccine for the highly contagious coronavirus disease could be considered the supporting factor for the currency pair. However, the risk-off market sentiment triggered by the Washington-Beijing tension becomes the key factor that kept the lid on any additional gain in the currency pair. Also capping the gains could be the fresh concerns over rising coronavirus cases in the U.S.

Moreover, the reports that the RBA will soon adhere to further Quantitative Easing (Q.E.) and a rate cut also initially weighed on the currency pair. Meanwhile, the broad-based U.S. dollar ongoing strength, backed by the safe-haven demand, also keeps the currency pair gains limited. The AUD/USD currency pair is currently trading at 0.7293 and consolidating in the range between 0.7272 - 0.7308.

The market trading sentiment was initially supported by optimism over a possible vaccine and treatment for the highly infectious coronavirus. But the gains were short-lived as the US-China tussle remains on the cards. At the US-China front, the rising tensions between the United States and China continued to pick up the pace as President Trump earlier imposed punitive measures over the Asian major. As a result, China announced new visa restrictions to counter the Trump administration's action against China. Also fueled the tension could be the fresh headlines suggested that the U.S. is considering banning some or all products made with cotton from China's Xinjiang region. Apart from this, the Brexit's gloomy headlines also weighed on the market trading sentiment, which eventually increased the safe-haven demand in the market.

Across the Ocean, the Dragon Nation and its neighbor India also found the conflicting track as both the countries still facing border issues wherein India fired shots off-late. Elsewhere, the Brexit pessimism and rising COVID-19 cases in India are also weighed on the market trading sentiment. In turn, this kept the market trading sentiment confused and underpinned the U.S. dollar as its safe-haven status. Whereas, the U.S. Dollar Index, which tracks the greenback against a basket of other currencies, rose by 0.13% to 93.168 by 9:53 PM ET (2:53 AM GMT).

On the contrary, the market trading sentiment seems rather unaffected by the U.S. stimulus package's latest progress. The Republicans raised its upper hand in the aid package discussions after the Friday's upbeat jobs report. In the absence of significant data/events on the day, the market traders will keep their eyes on the USD moves. The risk catalyst like geopolitics and the virus woes will be key to watch for the fresh direction, not to forget the Brexit.



Daily Support and Resistance

S1 0.7241

S2 0.726

S3 0.7269

Pivot Point 0.7279

R1 0.7287

R2 0.7298

R3 0.7317

The AUD/USD is trading with a selling bias at 0.7245 level, having crossed below 50 periods EMA level of 0.7310. On the 4 hour timeframe, the AUD/USD has formed a bearish engulfing candle that suggests odds of selling in the AUD/USD pair. The RSI and 50 periods of EMA are supporting selling bias in the pair. On the lower side, the AUD/USD may find support at 0.7223 and 0.7145. Let's consider taking buying trade over 0.7225 level. Good luck!

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